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Oil price concerns and ex-dividend stocks may weigh on Middle East stock markets on Tuesday, but strong first-quarter sales may support Dubai property developer DAMAC.
A monthly Reuters survey published on Tuesday shows Middle East fund managers may move further into cash in the near future as economic and geopolitical risks in the region rise. For the first time since the survey was launched in September 2013, the bears outweighed the bulls for both equities and fixed income simultaneously.
Crude oil
Oil futures extended losses on Tuesday as Iran and six world powers ramped up the pace of negotiations to reach a preliminary deal by the end of the day that could ease sanctions and allow more Iranian crude onto world markets. Brent crude has slipped 0.8 per cent and US oil fell 1.3 per cent.
Saudi Arabian petrochemicals fell on Monday in response to weaker oil, and they could remain under pressure if it continues to slide.
“We believe the sector’s profitability will remain under pressure, mainly due to lower prices of end products,’’ Aljazira Capital had said in a note on Monday, forecasting steep first-quarter profit declines for most companies in the sector.
DAMAC may rise
In Dubai, DAMAC may rise after a company executive told Reuters its sales hit 2.8 billion dirhams ($762 million) in the first quarter, increasing from the previous quarter thanks to strong demand from foreign buyers.
Meanwhile, engineering firm Drake and Scull may fall after its board proposed paying no dividend for 2014. The company had previously reported its annual profit dropped so many investors may not have been hoping for a dividend, however; Drake and Scull last paid a cash dividend for 2011.
Commercial International Bank, the biggest constituent of Egypt’s index, may slip on Tuesday as it goes ex-dividend.
On global markets, Asian stocks rose across the board on Tuesday morning after a rally on Wall Street and steps by China to shore up its economy boosted the risk appetite.
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